Keller-Sutter stated in an interview with Zurich newspaper NZZ, “CS would not have survived Monday. Without a solution, payment transactions with CS in Switzerland would have been significantly disrupted”
Swiss Finance Minister Karin Keller-Sutter recently told in an interview that the Swiss government was compelled to intervene to save Credit Suisse from imminent collapse. The bank was in deep crisis, and investor confidence had plummeted to a point where it would not have survived another day of trading without intervention.
Keller-Sutter stated in an interview with Zurich newspaper NZZ, “CS would not have survived Monday. Without a solution, payment transactions with CS in Switzerland would have been significantly disrupted, possibly even collapsed.”
The minister further estimated that the impact of a disorderly bankruptcy could have been as much as double the Swiss economic output, causing a global financial crisis.
The Swiss government-brokered purchase of Credit Suisse by UBS over the last weekend has been criticized for running roughshod over investors’ rights and saddling Swiss taxpayers with a significant burden in case of another crisis. However, Keller-Sutter maintained that the alternatives were worse.
Keller-Sutter told NZZ, “All other options were more risky for the state. Experience also shows that it can take years or even decades before the state can withdraw from ownership of a bank.” She further added that an orderly winddown was also ruled out since the damage would have been considerable, and Switzerland would have been the first country to wind down a globally systemically important bank.
Meanwhile, Keller-Sutter revealed to Swiss broadcaster SRF on Saturday that Credit Suisse had tapped the Swiss National Bank for “a large multi-billion amount” over the weekend to secure its liquidity. According to her, the figure was above 50 billion Swiss francs ($54.35 billion). “The important thing is that the situation has stabilised,” she said.
